Tax & Spend

No, that's not the motto of the Republican party. It's the first mentioned power granted to Congress by Art. I, Section 8. Despite some hiccups during the era of Dual Federalism, it is also one of Congress' most potent powers.

The powers to tax and spend are independent of Congress' other powers. That means even where Congress lacks power to regulate a particular area, say local crime (lacking a connection to interstate commerce), it can accomplish very similar objectives through its taxing & spending powers. Here's how.

Conditional Spending

Government benefits, including money, are seldom free; they usually come with strings attached. For instance, in order to qualify for federal education assistance, schools must agree not to discriminate on the basis of race. Title VI of the Civil Rights Act of 1964 (42 USC 2000d) provides:

"No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance."

Two things might happen in the event of noncompliance with these spending conditions. First, federal funding might be withdrawn or reduced. Second, a civil or criminal cause of action may lie against the offending party.

The first of these is properly seen as a condition on the receipt of federal funds. The S.Ct. no longer evaluates whether such a condition is "coercive" or regulatory in effect. So long as the condition is substantially related to the purpose of the grant, the only limitation on Congress is that the expenditure must be for the "general welfare." That, in turn is a quintessentially legislative matter, one that the Court will not second guess.

Incidental Regulation Pursuant to the Neccesary & Proper clause

To protect or effectuate federal spending, it may be appropriate for Congress to regulate activities that threaten spending objectives. Thus, in Sabri v. United States, Congress made it a federal crime to bribe a local official where the municipality was in receipt of federal monies. The Court upheld this regulation under the N&P clause (which augments all federal powers, including the spending power).

Does this mean that even where Congress lacks direct regulatory power, it may indirectly regulate as a necessary and proper means to promote funding objectives? Could Congress have required states to enact Gun-Free School Zones acts, or gender violence laws, as a condition for receiving federal education funds? Or does it mean that as the Court narrows the scope of federal regulatory power, it will return once again to the restrictive tests of Dual Federalism for taxing and spending measures?

Bottom line: Will Justice John Roberts resurrect his namesake, Justice Owen Roberts?

Posted by The Professor at March 2, 2006 05:54 PM | TrackBack